Market Update

When I see these kinds of breathless headlines from the ‘Fake News’, my BS detector antennae start to twitch a little. Those guys almost always get it wrong–so just something to think about. The job of the financial fake media is to push people to the other side of the pros’s trades at the fringes. It’s what they do… it’s what they have always done.

Let’s take a quick peek at the market structure here at a key inflection point…

click image to enlarge

On the monthly bar chart above note that we are now in the second consecutive ‘inside bar’. That configuration indicates a contraction of prices inside the long-term (second monthly bar back) and intermediate (previous monthly bar) trading ranges, which are 2603 to 2947 and 2626 and 2818 respectively. Last signals for each at Stops and Targets were range envelope support on October 29th.

Eventually we will get a breakout–but until that happens all of this volatility is essentially just going sideways. If price breaks and holds below 2626 that is a significant event and we would see new sellers come in under that line.

Note that the very long-term channel bottom is currently at 2542.75. That channel bottom has only been touched twice in the last 9 years.

click image to enlarge

Zooming in to weekly bars there are two significant things to point out…

We now have a new weekly 4-bar higher pivot low at 2603. That means that the hard deck for the Weekly Bar Paradigm that we have been exploiting here since 2009 moves up to that line. It also means that would be the next downside target for a stop sweep/reversal, which would be #10 in the sequence since 2009.

I have added a trident channel shown as light blue lines on the chart above. As I type, price is testing the bottom rail of that channel. Either we are going to get a bounce here–or a break would increase the likelihood of a downside breakout and a potential stop/sweep/reversal.

ES 2626 is the key number to watch. That is the trading range bottom for the intermediate term and where many stops are resting underneath. If 2626 gets taken out–then the big trove of stops under 2603 could be next.

If a move under 2603 happens then I will be on high alert to watch for a major stop sweep/reversal paradigm setup centered around 2603–and will have much to say about that, if it occurs.